• Created by: alersg24
  • Created on: 02-02-17 20:26
Operations Management
Involves process of transformation by turning inputs into g&s & distribute it to the customers
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Decisions being taken:
Level of output, Range of product, Level costumer's services, Buss flexibility, How best produce l/c intensive, provide customers onlins vs stores, supply chain
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Every opt management involves s.c
Series of activities taking initial resources to provide final product = RMMTRD
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Opt management> based transforming resources> involves adding value
Financially worth it ? Worth in term impact on society? How enjoyable it is? KEY = outputs value ^ input >aim alwys add value
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Operational objectives
how efficiently aspects process are achieved > muss fit overall competitive strategy of buss>quality; match expectations,speed of resp, dependability, flexibility, costs, enviromental objectives, safety targets
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Importance on specific operational objectives
Resc available > Nature of product> competitors performance> demand> ethical factors
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Nature of operations management vary enormusly
4 V's model > Volume, Variety, Visibility, Variability
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Internal influences
Markt= what be produced> how and quantities ,HR> what's possible staff, skills, experience, Finance> what can be produced, investment available
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External influences PEST-C
Political & legal factors: regulation, h&safety> restrct what can be produced, when to whom Economic > globalisation: supplier source,barriers trades, taxes.. Social factors= ^ demand choice & variety(online) Tech > quick test dev launch Compet> ^d,
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Analysing operational performance
Measure performance compared to operational objectives
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Labour productivity
measure output pre worker[ T.output : N. employees= influenced by training & skills, motivation, prod complexity, machinery
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Unit costs= Average cost of single unit of output
[T. cost : T. output] Influenced: N. u produced> ^use assets=-f.c/ negotiate disc supp> workforce efficiency> c.inputs>wastage
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Capacity: measures max buss can produce give existing resources
Max. achievable > all resc fully utilised > Cap increased long run by buying+ resc= problem ^workers mach overloaded &- flexb Cap reduced by downsizing resources Aim = match capacity to demand
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Capacity utilisation = measures % of potential output being achieved
[(actual output : max. output)x100] benefits ^capacity utilisation = F.C per unit - & profits ^
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Use of data in operational decision making
Able identify problems / oppoertunities > inform operations decision making & planning
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Labour productivity if l.p low= managers can identify the cause
training required? Indication of workforce morals> l used effectively > what increase l.p
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Unit cost high
maybe change suppliers? Labour productive? Levels of defects? Inputs utilised ? Use waste + efficient or reduce it
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Cpacity too low too high
Increase/ decrease capacity? Can demand be altered? Promotion/ higher prices
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If capacity utilisation too high too low
+ Resources used effectively ? Sufficient capacity meet target of flexibility ? Can buss take new customers? Resources stretch too much
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Increasing efficiency and productivity
Involves getting + output from give level of inputs( machinery, materials & people)= + efficient process = lower unit costs> use resources + efficiently
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^ efficiently by using capacity efficienctly
Match supply demand. Determines max can be produced at x time Capacity X used fully=wasted resources =^ u.c( Managers have boost sales> reduce price> spend + promotion> widen distribution> change product) - capacity>close redundancie lease assets
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Problems using full capacity
sweating its assets> work hard > low u.c/ affect quality& stress> workers x maintanence /Outsource to + producers( negotiate expensive q?)Reduce demand $^ waiting list, ^capacity + resources
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^efficiency by ^l. p
+ output from SAME n. employees > same wages & salaries= u.c fall = +l.p - u.c/^lp by training, ^motivation ($ or rewards), new tech,+ working practice, improved recruitment and selection Diff = - quality & cus satisfaction = damage long-t rep> + was
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^eff by choosing optimal mix resources = min cost> max quality product & customer service> optimal resource mix > aim, combine best
Land, Labour, Capital, Enterprise= combination depend on nature process C. int= ^proportion capital > machinery(2 sector) L. int= ^ labour 3 sector
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^efficiency by adopting lean production
- waste = operations + efficienct > japan > cutting waste improving quality > system & rules essentials unpredictable> wokers expecte active role > check own work= training &skill
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JIT operations = min inventory holding at each stage production process> help min costs
All members workforce involved > Kaizen groups> Improve can take place at any l. hierarchy > Requires ^motivated workforce > vital component TQM > improve quality of production process
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Advantages JIT
- cost holding inventory - working capital required - obsolete/ ruined inventory / - associated cost e.g seurity & insurance/ avoids unsold inventory
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Disadvantages JIT
X room errors / Reliant on suppliers / Hareder meet unexpected order/ Delays in deliveries > x seen circumstances= cause product halt/ ^set up cost / Complex system have be put in place
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^efficiency by using technology = use tools, machinery& computers> help produce g&s > used improve opt efficiency.
Robotics, Automation, Communication, Design technology Needs happen= Finance, Training , Skills adapt, Usefulness has be judge
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Ability of a product or service to exceed or meet expectations of cutom. Diff customers= diff perceptions of quality = Influenced: Price Brand Cusm pers experience , nature of p/s
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Quality measured...
by extent to which an opt meets customer requirements
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Develop quality process
Appropiate system needed/ If targets met = quality process
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Needed have quality operational process
PDAC> clear defnt of targets > be set meet custm requirement > system achieve target > training necessary = ongoing measurement of achieved vs targets
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Why quality important
Remain competitive > improve & offer + quality , gain retain loyalty, achieve lower u.c = less waste, USP , pricing decisions, + image & reputation
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Methods improving quality
1. Develop process = ensure targets are hit 2. Understand costm, requirements= market research 3. Select right supp 4. Training 5. Invest tech 6. Kaizen group
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Quality assurance & quality control
QA= checking p/s at every stage of production e.g as it travels along line ( self checking & adoption of system) QC= chekcing p/s before > delivering customerse.g. end of process(Inspection process)
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Benefits & difficulites of improvig quality
B= achieve optn. objectives> + competitive> - u.c , + reputation, motivated workforce D= employ x willing be respb, invest, training, system has be test implemented, reliant on supp, have be achieved & review regularly
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Consequences of poor quality
Cost money, rework faulty products, damagae reputation, can have legal costs
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Speed of response
speed product can be delivered > you competitive weapon, Reviewing process> save time > achievable inventory level lower& supp able change order size > quickly
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Reliable, Trustworthy> on time > match expectations > process starting & finishing STATED TIME + important in some industries( new process, investment, training)
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Ability respond to change > meet sudden +- demand, change aspects of produc> meet customers taste. Respond erratic demand = season/ fashion> improved by managing own inventory + s.c, good relation supp, quick respond ongoing needs, JST tech= help
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N of goods held in store= Inv of suppliers Inv of work in progress Inv of finished goods
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Why do buss hold inventory ?
ensures production> take place immediately > customers orders fulfilled quickly = control and monitor flow stock
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Influences on stock hold
attitude to risk , importance of speed of response > operational objectives> soc within market> nature of product
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Costs of holding inventory
Storage, Security, Opportunity C, Losing value
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Inventory Control Charts > Problems
Supply delayed > X arrive on time > use buffer, Usage rate faster than usual> maybe+ demand, Run of inventory = halt production > customers' dissadisfaction
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Tech can help by
Better track of inventory > know what buss has available & reordering is needed Better marketing data based> forecast sales> avoid running out > improve efficiency
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Lead time
The time from placing the order to getting the delivery
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Re-order level
When it reaches this level more inventory is ordered either manually or automatically
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Buffer inventory
held in case there is a problem with delivery of new stock or a sudden increase in demand
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Managing supply chain
S.C of a business refers to all providers of resources ( $ equipment finance machinery persons) at different stage of the operations process
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Supply chain decisions :
What produce yourself/ buy others, Suppliers strategy> how many supp> term & conditions> assurance, how much direct involvement supp have ...
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Benefits managing s.c effectively
Right supp on time, Fair price for items, Products produced in acceptable way
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How could bussines take + control of their supply chain ?
Owning + storage within it= Vertical Integration
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In what ways have managing s.c become easier or + complex ?
Diff. = + important & + complex > many customers> want know about how & where a product is placed > have to investigate Easier: Greater globalisation > easier find suppliers arround the world
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Influences on choice of suppliers
Price, Payment, Quality, Capacity, Reliability, Flexibility> pass saving consumers in form of l prices or enjoy ^profit margins, value for $
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Managing supply to match demand
Some industries have + stable demab others vary, it differs from the sector
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practice using services of other orgst complete all or part of the process= + provides flexibility in supply, can ^capacity with out ^capital expenditure, can buy un expertise - quality should be mantained, sub contractor will + make profit
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Other cards in this set

Card 2


Decisions being taken:


Level of output, Range of product, Level costumer's services, Buss flexibility, How best produce l/c intensive, provide customers onlins vs stores, supply chain

Card 3


Every opt management involves s.c


Preview of the front of card 3

Card 4


Opt management> based transforming resources> involves adding value


Preview of the front of card 4

Card 5


Operational objectives


Preview of the front of card 5
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